City agrees to adopt fiscal reform recommendations
The City Council on Monday approved a non-binding resolution embracing a series fiscal reform recommendations intended to supplement those outlined in a November ballot measure seeking a half-cent sales tax increase.
The resolution calls for the city to commit to $73 million in annual cost reductions, freeze new spending at $20 million annually and dedicate a portion of any future potential budget surpluses to reserves or infrastructure.
The City Council voted 6-2 to adopt the resolution. Councilmen Carl DeMaio and Kevin Faulconer were opposed.
The recommendations were made by the 11-member Citizen’s Fiscal Sustainability Task Force in a report last month.
Businessman Vincent Mudd, who chairs the task force, said that if the city follows the recommendations, and if Proposition D passes on Nov. 2, San Diego could eliminate its ongoing budget shortfalls by 2018.
“If Prop. D passes, and the resolution before you passes, and you practice these principles, can the structural deficit be eliminated, and the answer is yes,” Mudd told the City Council.
Proposition D would raise an estimated $103 million a year for the city. The sales tax increase, which would expire after five years, would only take effect if 10 fiscal and pension reform measures are met first.
Mayor Jerry Sanders’ office has projected a budget shortfall for San Diego of $72 million next fiscal year.
At the start of today’s hearing, Sanders testified that a “comprehensive solution,” which includes new reforms and new revenues, is needed to overcome San Diego’s long-term budget woes.
“Together, they will prevent the cuts that otherwise will surely be coming,” he said.
Sanders cautioned that without added revenue, there will be more “draconian” cuts to city services, including public safety.
DeMaio, who has led the charge against Proposition D, argued that the task force’s recommendations are are not binding because they are not included in the ballot language for the measure.
“It’s symbolic,” DeMaio said of the resolution. “It has no legal guarantee behind it.”
City Attorney Jan Goldsmith concurred, telling the council that the decree is “not legally binding.”
Independent Budget Analyst Andrea Tevlin cautioned the City Council that it may not be able to achieve the $73 million a year in cost-cutting measures outlined by the task force and said it was “troublesome” to lock the city into those types of savings.
Council President Ben Hueso disagreed. He said the figure was an “achievable goal.”
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